Could Trump Start a Trade War Regardless of Congress? Not So Fast.

In a study released yesterday well-known veteran trade policy analyst Gary Hufbauer sounds the alarm that Donald Trump could use presidential authority under a range of arcane statutory provisions to start a trade war immediately upon taking office-with Congress and the courts helpless to stop him, at least in the short run. These statutory provisions give the President discretion to increase trade restrictions, including tariffs, for certain defined purposes, mostly related to emergencies and national security. Essentially, Hufbauer warns, Trump could act in a Schmittean fashion, using or more likely abusing existing legal exceptions to do an end run around the separation of powers and dictate trade policy from the White House, with ominous domestic and international consequences. Hufbauer's alarmism echoes a much more scholarly and less sensationalist article by Yale law professor Oona Hathaway, where she argues that Congress has through various devices given away to the executive a significant amount of control over areas international policy where the legislature has constitutional authority-with, Hathaway suggests, potentially harmful consequences to American democracy.

A free trader of the old school, Hufbauer's intent can't be to help a Trump administration close America's borders. It might be, as a matter of longer-term policy, to warn Congress about handing over too much to the Executive-an arguably salutary exercise, in the spirit of Hathaway's. Or Hufbauer's aim could be to inspire US and foreign interests that depend on importing into the US to make contingency plans that would address the disruption of supply chains, that-on Hufbauer's analysis-could be accomplished with great rapidity through presidential discretion.

One of Hufbauer's points, which is important for Congress to consider in its future crafting of delegations of executive power, is that judicial review of the exercise of discretion may be of limited effectiveness, especially in avoiding what could be significant immediate harm from abusive exercise of that discretion. This is reminiscent of the Schmittean analysis of the separation of powers and constitutional constraints on executive power by Eric Posner and Adrian Vermeule, The Executive Unbound.

A careful evalutation of Hufbauer's claims should start with a reminder that, as a general matter, the United States' commitments under international trade agreements, whether the WTO treaties or the NAFTA, are brought into US law through implementing legislation by Congress. While as a matter of international law the executive branch could surely give notice of withdrawal from the WTO or NAFTA, this would not alter the domestic legal status of America's obligations under these agreements. To do that would require that Congress act.

That US respect for the basic international legal framework on trade cannot,practicably, be overturned without Congress is important and should be well-understood by our trading partners-even if Hufbauer is right that Trump might be able to do mischief through abusing certain exceptional grants of presidential authority to raise trade barriers. A close look at these exceptional clauses shows that room for such mischief is limited. Only on the assumption that Trump intends a constitutional coup d'etat and would use these provisions without any regard for the rule of law and the courts, would the harm be unmanageable. If that's what Trump does, we would have much more to worry about than trade, for sure.

But let's assume that Trump invokes the exceptions to make a big bang, so to speak, but intends ultimately to yield to the courts and to act within some plausible interpretation of the exceptional clauses in question. Would our trading partners take this as a signal that the international legal framework is dead or mortally wounded? Or would they remain calm and pursue the available legal angles, both at the WTO and in the domestic US courts to bring the executive to heel?

There is no small amount of exaggeration in Hufbauer's account of the various arcane statutory provisions on which Trump might rely. Take for example the NAFTA Implementation Act of 1993. Hufbauer suggests that under that law, the President can raise tariffs on imports from Mexico and Canada to MFN bound rates (the WTO tariff ceilings) by mere proclamation, albeit after consultations with Congress. However, an examination of the provision in question reveals that its purpose is limited to the implementation of the staged elimination of tariffs as set out in various clauses in Chapter 3 of NAFTA. If one of the US's NAFTA partners gets behind in its timetable for removing tariffs under NAFTA the President may raise tariffs on the product in question from that NAFTA partner to maintain reciprocity. Since the staging period for tariff elimination under NAFTA has long passed (NAFTA aficionados correct me if I'm wrong), the presidential authority that Hufbauer presents as ominous is in fact moot, of only historical significance.

Or take Hufbauer's claim that trump might invoke the Trading With the Enemy Act 1917 (TWEA) in order to impose high tariffs on Mexico and China. Hufbauer suggests that the TWEA allows the President to impose trade restrictions, regardless of whether the target country is a threat to US national security or the restrictions are related to the war effort. Yet in the late 1970s the TWEA was amended precisely to prevent this open-ended type of use of the TWEA. Hufbauer tries to minimize the new constraint on the use of the TWEA by saying that even though the TWEA limits the Presidential power to restrict trade to "time of war", "presidents have engaged in 125 military actions without prior congressional approval." Yet the definitions in the TWEA make it crystal clear that as the term is used in the statute, "war" only begins after Congress declares war or a state of war and that war ends either with a treaty of or when the President proclaims the end of the war. With President Obama having formally proclaimed the end of the US war in Iraq and Afghanistan, there is is no existing congressional declaration of war on which Trump could rely to invoke the power to restrict trade under the TWEA. (In fact, even in the case of Afghanistan and Iraq while Congress authorized US operations there was strictly speaking no formal declaration of war).

Then there's the International Emergency Economic Powers Act of 1977 (IEEPA). The legislation clearly recognizes the dangers of abuse and explicitly indicates that it may not be used for any purpose other than "to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat." Contrary to Hufbauer's presentation, the IEEPA does not give the President authority to increase tariffs, but rather (apart from controlling currency and exchange transactions) to regulate the disposition of foreign-government owned property or property owned by foreign nationals that may pose an "unusual and extraordinary threat" to the national security, etc. of the United States. There there is the important caveat that the property, or a person purporting to transact in it, is properly subject to US jurisdiction. In order to control such property it is true that the President may restrict its importation and exportation. But it's obvious that this kind of provision could not on any plausible theory be used to increase tariffs across-the-board on ordinary imports, since imports coming into the United States may very well be the property not of foreign nationals but of US consumers or importers, or be part of the supply chains of US multinational companies.

It would try the readers of this blog if I were to go through the fine print of all the other statutes invoked by Hufbauer and compared the text with his claims (though if I'm challenged to do so, I'll post again). If you don't think Trump will respect the law as its written and believe he will simply invoke statutes in a transparently fraudulent manner to suit his purposes and then keep the courts at bay somehow, and that he can pull off what amounts to a constitutional coup, well,I admit it's a possibility, utterly frightening. But if the rule of law has any meaning, the provisions cited by Hufbauer offer little or no room for Trump cavalierly to ignore the existing international obligations of the United States and start a global trade war.

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Could Trump Start a Trade War Regardless of Congress? Not So Fast.

In a study released yesterday well-known veteran trade policy analyst Gary Hufbauer sounds the alarm that Donald Trump could use presidential authority under a range of arcane statutory provisions to start a trade war immediately upon taking office-with Congress and the courts helpless to stop him, at least in the short run. These statutory provisions give the President discretion to increase trade restrictions, including tariffs, for certain defined purposes, mostly related to emergencies and national security. Essentially, Hufbauer warns, Trump could act in a Schmittean fashion, using or more likely abusing existing legal exceptions to do an end run around the separation of powers and dictate trade policy from the White House, with ominous domestic and international consequences. Hufbauer's alarmism echoes a much more scholarly and less sensationalist article by Yale law professor Oona Hathaway, where she argues that Congress has through various devices given away to the executive a significant amount of control over areas international policy where the legislature has constitutional authority-with, Hathaway suggests, potentially harmful consequences to American democracy.

A free trader of the old school, Hufbauer's intent can't be to help a Trump administration close America's borders. It might be, as a matter of longer-term policy, to warn Congress about handing over too much to the Executive-an arguably salutary exercise, in the spirit of Hathaway's. Or Hufbauer's aim could be to inspire US and foreign interests that depend on importing into the US to make contingency plans that would address the disruption of supply chains, that-on Hufbauer's analysis-could be accomplished with great rapidity through presidential discretion.

One of Hufbauer's points, which is important for Congress to consider in its future crafting of delegations of executive power, is that judicial review of the exercise of discretion may be of limited effectiveness, especially in avoiding what could be significant immediate harm from abusive exercise of that discretion. This is reminiscent of the Schmittean analysis of the separation of powers and constitutional constraints on executive power by Eric Posner and Adrian Vermeule, The Executive Unbound.

A careful evalutation of Hufbauer's claims should start with a reminder that, as a general matter, the United States' commitments under international trade agreements, whether the WTO treaties or the NAFTA, are brought into US law through implementing legislation by Congress. While as a matter of international law the executive branch could surely give notice of withdrawal from the WTO or NAFTA, this would not alter the domestic legal status of America's obligations under these agreements. To do that would require that Congress act.

That US respect for the basic international legal framework on trade cannot,practicably, be overturned without Congress is important and should be well-understood by our trading partners-even if Hufbauer is right that Trump might be able to do mischief through abusing certain exceptional grants of presidential authority to raise trade barriers. A close look at these exceptional clauses shows that room for such mischief is limited. Only on the assumption that Trump intends a constitutional coup d'etat and would use these provisions without any regard for the rule of law and the courts, would the harm be unmanageable. If that's what Trump does, we would have much more to worry about than trade, for sure.

But let's assume that Trump invokes the exceptions to make a big bang, so to speak, but intends ultimately to yield to the courts and to act within some plausible interpretation of the exceptional clauses in question. Would our trading partners take this as a signal that the international legal framework is dead or mortally wounded? Or would they remain calm and pursue the available legal angles, both at the WTO and in the domestic US courts to bring the executive to heel?

There is no small amount of exaggeration in Hufbauer's account of the various arcane statutory provisions on which Trump might rely. Take for example the NAFTA Implementation Act of 1993. Hufbauer suggests that under that law, the President can raise tariffs on imports from Mexico and Canada to MFN bound rates (the WTO tariff ceilings) by mere proclamation, albeit after consultations with Congress. However, an examination of the provision in question reveals that its purpose is limited to the implementation of the staged elimination of tariffs as set out in various clauses in Chapter 3 of NAFTA. If one of the US's NAFTA partners gets behind in its timetable for removing tariffs under NAFTA the President may raise tariffs on the product in question from that NAFTA partner to maintain reciprocity. Since the staging period for tariff elimination under NAFTA has long passed (NAFTA aficionados correct me if I'm wrong), the presidential authority that Hufbauer presents as ominous is in fact moot, of only historical significance.

Or take Hufbauer's claim that trump might invoke the Trading With the Enemy Act 1917 (TWEA) in order to impose high tariffs on Mexico and China. Hufbauer suggests that the TWEA allows the President to impose trade restrictions, regardless of whether the target country is a threat to US national security or the restrictions are related to the war effort. Yet in the late 1970s the TWEA was amended precisely to prevent this open-ended type of use of the TWEA. Hufbauer tries to minimize the new constraint on the use of the TWEA by saying that even though the TWEA limits the Presidential power to restrict trade to "time of war", "presidents have engaged in 125 military actions without prior congressional approval." Yet the definitions in the TWEA make it crystal clear that as the term is used in the statute, "war" only begins after Congress declares war or a state of war and that war ends either with a treaty of or when the President proclaims the end of the war. With President Obama having formally proclaimed the end of the US war in Iraq and Afghanistan, there is is no existing congressional declaration of war on which Trump could rely to invoke the power to restrict trade under the TWEA. (In fact, even in the case of Afghanistan and Iraq while Congress authorized US operations there was strictly speaking no formal declaration of war).

Then there's the International Emergency Economic Powers Act of 1977 (IEEPA). The legislation clearly recognizes the dangers of abuse and explicitly indicates that it may not be used for any purpose other than "to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat." Contrary to Hufbauer's presentation, the IEEPA does not give the President authority to increase tariffs, but rather (apart from controlling currency and exchange transactions) to regulate the disposition of foreign-government owned property or property owned by foreign nationals that may pose an "unusual and extraordinary threat" to the national security, etc. of the United States. There there is the important caveat that the property, or a person purporting to transact in it, is properly subject to US jurisdiction. In order to control such property it is true that the President may restrict its importation and exportation. But it's obvious that this kind of provision could not on any plausible theory be used to increase tariffs across-the-board on ordinary imports, since imports coming into the United States may very well be the property not of foreign nationals but of US consumers or importers, or be part of the supply chains of US multinational companies.

It would try the readers of this blog if I were to go through the fine print of all the other statutes invoked by Hufbauer and compared the text with his claims (though if I'm challenged to do so, I'll post again). If you don't think Trump will respect the law as its written and believe he will simply invoke statutes in a transparently fraudulent manner to suit his purposes and then keep the courts at bay somehow, and that he can pull off what amounts to a constitutional coup, well,I admit it's a possibility, utterly frightening. But if the rule of law has any meaning, the provisions cited by Hufbauer offer little or no room for Trump cavalierly to ignore the existing international obligations of the United States and start a global trade war.